NFTs and the Environment

NFTs and the Environment

The start of this year has certainly seen a huge change for many different markets, with the flexing to show a recovery period from the ongoing COVID-19 pandemic, the future could certainly look very different for many. The expansion of video content away from the cinema and onto online streaming platforms is just one of many, similarly the closure of many brick-and-mortar betting locations and the rise of online gambling through the biggest online services has only continued too. This is something we have clearly seen with online horse betting, that has grown further in popularity. But the financial market has also seen change, a lot of hype had been generated around the NFT market on the Ethereum blockchain as huge sums of money were paid for digital artworks throughout the start of the year, but as with anything new the controversy quickly followed, and the argument against the new wallet for digital collections was around the impact it could have on the environment – but are these legitimate concerns, or more of a scare mongering tactic?

Is the current NFT Art Boom bad for the environment?

It certainly isn’t the first time anything crypto has raised concerns around its impact on the environment – it’s more than well known now that the big farms created for mining the likes of bitcoin require a huge power draw as well as others power draw requirements through heating and cooling for example, not just the power draw from the systems used. But now the NFT market has also been targeted for the same reasons, there have been those who have already stated that they’re going to move away from the market as even though there are huge opportunities to make good money, the environmental cost was far too high – an architect who had planned to sell some works on the blockchain had stated that to mint just one of his pieces one require the same amount of electricity used in just one month, and with the aim to create 300 tokens, that would be the same as using 300 months’ worth of electricity. 

Much of this isn’t based off on any legitimate research conducted however, as the architect based his calculations from a controversial blog – the blog in question suggested that an average Ethereum transaction of which the NFT Blockchain is on, would quate to an average of around 35 kWh, or the equivalent to an EU resident’s consumption for four days.

Until there is a lot more research done in the space, some of the figures being quoted do seem a little farfetched and not really rooted in fact, after all if you’re minting one token for NFT or one hundred, it isn’t a sequential thing that goes one after the other, and as such doesn’t really make all that much sense. Perhaps there will be more information available moving forward but given there will be efforts to disrupt the huge NFT market early on, this seems to be the first of many hurdles to overcome.

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